City Grocery Store Closing After 83 Years, Owner Blames Bottle Tax

City Grocery Store Closing After 83 Years, Owner Blames Bottle Tax

Blaming the city's beverage tax, Rob Santoni talks with WBAL's Bill Vanko about the decision to close his family's grocery store after more than 80 years of operation in Baltimore Download This File

Mayor Stephanie Rawlings-Blake signs the bill that increased the bottle tax from 2 to 5-cents a bottle, during a cermeony in June, 2012. (WBAL file photo)

Sandy Vary, co-owner of Bi Rite on Bel Air Road talked with WBAL's Steve Fermier about the bottle tax and Santoni's decision to close Download This File

Calling the loss of business from the city's bottle tax "irreversible," the owner of Santoni's Supermarket of Highlandtown says he will close the supermarket by the end of the month, laying off 80 workers.

The store on East Lombard Street had been in business for 83 years.

In a news release, owner Rob Santoni also said he is ending a partnership with the Baltimore City Health Department that established a "virtual supermarket," allowing residents who live in neighborhoods without grocery stores to order groceries online. Santoni's also is ending a free shuttle service for residents who live in what are called "food deserts" to get to his store.

Santoni places the blame for the closing on a loss of business from the bottle tax, enacted in 2010, and then increased last year.

Mayor Stephanie Rawlings-Blake says the tax was needed to help close the city's defcit, and to help pay some of the hundreds of millions of dollars to repair or replace school buildings in the city.

Santoni and other retailers, along with the National Federation of Independent Businesses and the American Beverage Association, campaigned against the tax.

In his news release, Santoni said that Mayor Rawlings-Blake "has refused to listen to small business leaders. She is stubborn and will not admit that the beverage tax was a wrong decision on her part. Her insistence that Baltimore retailers carry this burden has not only cost my family our business, but the jobs of my employees."

"What has taken 83 years to build has been torn down by one person and one bad law. The MayorÆs political arrogance is appalling. She obviously does not possess certain skills needed to run this City. The City has lost a great retailer and the Highlandtown community is losing a passionate and charitable partner,ö Santoni added.

The grocer reports that the store has lost more than $4-million in sales since 2010 or 18%. He says beverage sales dropped more than 28% since the tax went into effect, and customer traffic count has dropped 20%.

Santoni had argued that because of the tax, many customers of his store and other retailers are buying beverages in either Baltimore County, or Anne Arundel County, where there is no beverage tax.

The 2-cent-a-bottle tax took effect in July, 2010. Last year, the city council voted to make the tax permanent, and increase it to 5-cents-a-bottle.

The tax applies to sodas, and most other bottled drinks with the exception of milk.

Late Sunday night, Mayor Stephanie Rawlings-Blake released a statement defending the tax.

"I'm deeply saddened to learn that Santoni's Supermarket will be closing. Linking its closure to the bottle tax may be a good sound bite, but it doesn't square with the facts," the mayor said in a statement released through her office."

"By the supermarket's own admission, business struggled in recent years, which isn't surprising given the depths of the nation's recession and its impacts on local governments and businesses. My Administration supports small businesses, which is why we worked in partnership with Santoni's to establish our nationally renowned Virtual Supermarket Program that has provided healthy food choices to low-income residents and drove additional customers to the supermarket.

"It's important that we not lose sight of the facts. The beverage tax was critical to helping Baltimore close a massive budget deficit without cuts to city services and provided a dedicated funding stream to help secure a historic investment of $1 billion in school construction funds. No one likes tax increases, but kicking the can down the road when it comes to our financial solvency and investing in our children is not an option."